My friend Nancy sent me the following thoughts in response to my Monday blog, when I wondered why anyone (especially investors) would buy new construction in Las Vegas:

I saw your blog today and I thought I would email you some observations about the real estate

market in Las Vegas from a perspective of someone not in the real estate business, but as someone who stays there frequently the past few years and checks to see what is new in the market there (thinking of retirement).....

This is purely just my perception of the Henderson area (more desirable area on the east side)..... Both J. and M. [her sons] live in Henderson, but about 4 1/2 miles from each other..... J. lives in an apartment on a golf course in a very nice established area called "Green Valley" area of Henderson.... M. lives with his girlfriend in the West Henderson area in a new subdivision called "Inspirada".

What I have observed is that the townhouse M. and J. used to rent starting 2 years ago in the "Green Valley" area, which was very nice, was going in 2008 for $180K to $225K..... last summer it dropped down to the $125K range, (all for the same 2 bedroom/3 bathroom 1250 sq ft unit) and currently there are 3 of those same units on the market for $89K.... all within 2 years.

…As the prices have fallen, it’s bringing in a different socio-economic level of people that others may or may not want to live around. These townhomes were built in the early mid 90s...There is definitely a contrast in the people living in the older areas versus the newer areas. For one, in these new subdivisions, its owner-occupied pretty much, and they had to qualify for the loans versus investors moving in their tenants....Because of that, it’s my perception that there is greater care in that area.

I was shocked to see more and more new townhouse buildings being put up around M. and his girlfriend.... its growing like mad and people are buying....maybe it’s also the price range? You have entry level townhomes in amongst 500K homes also, so it’s more upscale at an entry level price, with younger professionals or retirees going into them.

It's funny cause just last night in a conversation with M. on the phone, he was telling me he's considering buying for investment where he's at because he is absolutely convinced that 8 - 10 years when things turn around the units will definitely be up in value because of the location next to high end areas. So, it’s just a tidbit I thought you might find fascinating....